Can Private Sector fill the gap in Agricultural Extension?

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 1

Can Private Sector fill the gap in Agricultural Extension?Presented by:Suresh Babu

Senior Research FellowInternational Food Policy Research Institute, Washington D.C.

atThe SASKI Brown Bag Lunch, World Bank, Washington D.C.

16th December 2015


Overview Introduction

Conceptual Framework

Case Studies on Private Extension

Synthesis of Results

Conclusions

Challenges and way forward

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What is private extension?The concept of private extension emphasizes three aspects, which includes:

involvement of extension personnel from a private agency or organisation

payment of services by the client through a service fee, directly or indirectly

playing supplementary or alternative role to public extension services

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Why are private extension systems important?

• Declining budget allocation for the public extension by the Governments and donors

• Transformation of agriculture from subsistence level to commercialized agribusiness

• Concerns on efficiency and effectiveness of public extension

• Beneficiary contribution for ensuring demand driven and accountable extension provision

• Private extension to supplement and complement the public extension

• Decentralization of public extension

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Research questionsPrivate extension is demand-driven and its uptake is need-based, leading to the following questions: • What is the difference between private and public extension systems? (Birner et al., 2009)

• What regulatory mechanisms and institutional arrangements must be developed to support private extension?

• What are the latest innovations in extension provision?

• What are the motivations and incentives for private companies for knowledge sharing?

• What are the opportunities for private knowledge entrepreneurs (Dewhurst et al., 2013)

• What role can policymakers play in shaping and supporting inclusive innovation systems? (Foster and Heeks, 2013a,b)

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About the book…

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To better understand different models of extension delivery and financing by private companies

across the agricultural value chain

To provide an assessment of what are the factors leading to successes

or failures of various approaches

To draw lessons and recommendations for future

endeavors.

Presents 10 cases of private extension across 7 countries.

Using various data collection methods, research techniques and

field interviews

Analyses of trends, commonalities and differences among various

extension approaches

Rationale for the book Methods used


Conceptual Framework

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Operational Framework for Assessing, Analyzing, and Acting on Extension Reforms

The framework for assessment of private extension requires: Assessment of the current state of extension:

• Quantitative methods• Qualitative methods

Analysis of extension provision:• Internal Factors• External Factors

Dialogue and consultations:• Key Informant interviews• Focused group discussions

Action plan for reforms

Program implementation, monitoring and evaluation

Assessment

Analysis

DialoguesAction plan

Implementation; Monitoring and

Evaluation


Case Study I: EID Parry, India EID Parry is the oldest private sugar mill in India

Motivation for private extension provision:• Regular supply of sugarcane for crushing needed

• The area under sugarcane cultivation is decreasing with ourbanization; o subsidy for cashew plantation;o reducing water table

• Decrease in sugarcane yield

• Increase in labor wages

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Uniqueness

Company has managed to break the smallholder syndrome

Effectively pulls the global, regional and national knowledge needed for

successful cultivation of sugarcane by the area farmers


Case Study II: Kenya Horticulture Exporters (KHE) Kenya Horticulture Exporters (KHE) is a leading exporter of vegetables and fruits in Kenya

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KHE

Finance /Input Farmers

Loan repayment

Credit / Inputs

Extension Approach of KHE

Uniqueness KHE enables smallholders to capture

value in export markets

It empowers them to understand and work with international standards

Create further value for local communities by employing people in processing, packaging and logistics


Case Study III: Rio de Una, Brazil

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Rio de Una is a food processing company which connects farmers to the buyers of the fresh vegetables

Uniqueness It is a win-win situation, where it is in

the best interest of the company and the farmers is met

Provides attractive employment opportunities to rural youth

Works well as viable alternative to public extension systems for family farms that meet minimum level of agricultural production required

Vegetable farmers – Organic and Traditional Extension Services

Extension / Technical Associates

Credit

Organic certification

Equipment rental

Own seedlings

Research linkage

EMATER

Micro-irrigation

Rio de Una-Vegetable processing and

packaging

Bob’s McDonalds Other

retailers Walmart

Retail stores

Wholesale market

Consumer

Vegetable purchase by Rio de Una

Vegetable Value Chain and the Role of Private Extension in Brazil


Case Study IV: Syngenta Frijol Nica Program, Nicaragua

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Key Objective

To provide an integrated package of high-level technological solutions, technical assistance, support in market linkages, and education for bean producers and their families through:

Knowledge Transfer

Technical Support

Financing

Uniqueness Program identified opportunities

to turn bean cultivation into a highly technical, profitable activity

The extension model combines input supply and technical assistance with financing as well as partnerships with commercial groups.

The Frijol Nica program was initiated by Syngenta and a strategic partner, Rappaccioli McGregor, S.A. (RAMAC) in 2006


Case Study V: Multi-Trex Integrated Foods, Nigeria

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Uniqueness It makes profitability of cocoa production for

farmers a key consideration in its operation

Focuses on production of high quality cocoa

Enabled efficient communication and keeping the extension service demand driven and focused on issues highly relevant for the smallholder cocoa production

Multi Trex works in the cocoa value chain and provides extension services designed to target cocoa farmers and assist them to:

Increase the quality of cocoa supplied through certification and good agricultural practices

Increase their productivity

Increase input availability for farmers

Ensure regular supply of cocoa


Case Study VI: Jain Irrigation Systems Limited, IndiaJain Irrigation Systems Limited (JISL)is a multinational organization known for its pioneering work in the micro-irrigation industry

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Uniqueness The successful vertical integration of

JISL extension program in the white onion value chain from input provision

to processing

Contract farming has increased farmers’ return on investment while

creating profit for the company.

JISL Extension Program

• JISL provides agricultural inputs like seed, bio-fertilizer, micro-irrigation system (e.g. drip), seed planters, package materials (‘gani’ bags), and a comprehensive package of extension services

• After harvest, the produce is bought back by JISL at minimum support prices or market price, whichever is higher

• On average, farmers have achieved 130% yield increases.


Case Study VII: Marico Limited, IndiaMarico Limited is one of India's leading consumer product & services companies operating in the beauty and wellness industry It is currently the largest buyer of safflower in India which is marketed under its healthcare products in the safflower value chain to provide extension to farmers

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UniquenessThe program focuses on profitability of safflower production rather than only

increasing the levels of safflower production for its own supply

Direct linkages between producers (farmers) and processors (industry) of safflower seed tightens the supply chain, leading to more efficient communication and

coordination between actors


Case Study VIII: PRAN, BangladeshPRAN is the largest certified agro food exporter in the agro processing sector in Bangladesh

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UniquenessPRAN’s well-defined field-level network,

and organized input distribution and crop collection system

Guarantee of sale

elimination of the middle men through creation of ICT enabled agricultural hubs

PRAN’s Vision

To enrich the agriculture sector by creating more demand for agro

products and enhancing production by providing training and financial

support to the participating farmers


Case Study IX: Sarveshwar Organic Foods Limited, India

Sarveshwar Organic Foods Ltd. was established in 2004 and is involved in the farming, processing, and export and marketing activities of organic produceThe company’s extension program focuses on smallholder farmers growing Basmati rice organically in 157 villages of Jammu, Samba and, Kathua districts of Jammu.

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Publicity of

Material

Prepare and

maintain Field

Diaries

Extension Activities

Traceability of produce

Awareness Generation

Internal Inspection

External Inspection

Uniqueness purchases rice from the farmers on the premium rates

on buy back basis

efficient systems of procurement, storage, monitoring and delivery of produce

The requirements and obligations of organic production and contract with the company are explained to the

farmers upfront.

Awareness Generation

Internal Inspection

External Inspection


Case Study X: An Giang Plant Protection Joint Stock Company, VietnamAn Giang Plant Protection Joint Stock Company (AGPPS) is a provider of seedlings, fertilizers, and pesticides and a conduit for the transfer of agricultural technologies and cultivation techniques in the rice industryTo address major agricultural pests and diseases threatening Vietnamese rice producers, AGPPS selected well-informed farmers to act as ‘farmers’ friends' (FFs) to aid small holder farmers

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Uniqueness• AGPPS has an extensive distribution network and flexible sales policies

• Offers high quality products, provides advanced technical assistance to farmers, and has strong marketing campaigns, providing end to end solutions to farmers


Synthesis of Results I: OverviewInvolves complete set of actorsQuality of the produce drives private extensionCompetitiveness in global markets Cost of extension is captured by the private sectorShared value addition – ensures sustainabilityNet profitNatural Resource Management

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Synthesis of Results II: Impact of Private extension

Benefits of Private Extension

India/ Sugarcane

Kenya/ Vegetables

Brazil/ Vegetables

Nicaragua /Beans

Nigeria/ Cocoa India/ Onions

Yield increases +++ ++++ ++++ +++++ ++++ ++++

Cost reductions ++++ +++ ++ ++ ++ ++++

Quality and consistency of outputs

+++ ++++ ++++ +++ ++++ ++++

Increase in net profit

+++ ++++ +++ +++ ++++ ++++

Natural Resources Benefits

++++ +++ ++++ +++ ++ ++++

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Impact of the private extension system

Note: This is given in the format of “before and after” keeping before at the “++” level


Synthesis of Results III: Feedback on the private extension services

The case studies also provide feedback from the contract farmers themselves, the extension workers, the communities in which the companies operate, and the company management.

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Crop/Nature of advice India/ Sugarcane Kenya/ Vegetables Brazil/ Vegetables Nicaragua /Beans Nigeria/ Cocoa India/ Onions

Pre-planting advice +++ +++ ++++ +++ ++ ++++Input supply – seedlings/ seeds

++++ +++ ++++ +++ ++ ++++

Input supply – fertilizers and chemicals

++++

++ ++ ++++ ++++ ++

Help with crop loans ++++ ++ +++ +++ +++ ++++Irrigation systems ++++

++ ++ ++ ++ ++++

Intermediate cultivation / weeding

+++ +++ ++ +++ ++ +++

Harvesting

Help / advice

++ +++ ++++ ++ ++++ +++

Post-harvest advice ++ ++++ ++++ ++ +++ ++Marketing advice /Help ++ ++++ +++ +++ ++++ ++++

Ranking: +++++ excellent ++++ very good+++ good ++ fair + poor


Conclusions IProvision of integrated services

Better research-extension linkages

Market connections – assured market access

Reduction in price uncertainty

Inclusive innovation

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Conclusions IIEnhanced use of quality inputs

Product differentiation

Solidarity building

Cost recovery

Demand driven

Capacity development

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Final RemarksAccess to knowledge is a key determinant of agricultural growth

Private extension plays an important role in the pluralistic extension system

Private extension programs for value chains are effective, but their coverage is limited

Perfect substitute for public extension systems?

Public-private partnerships to increase the efficiency and effectiveness of the public extension system

Need better understanding of costs and benefits of innovations in extension approaches16th December 2015


Challenges and way forward…Need to monitor private companies to avoid undue exploitation of farmers

Dispute resolution is another major challenge

What price do farmers pay for extension services?

The scale (and scope) of private companies’ operations may remain limited

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INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 2516th December 2015

Thank you!

Can Private Sector fill the gap in Agricultural Extension?

Government & Nonprofit

Transcript of Can Private Sector fill the gap in Agricultural Extension?